This application is concerned with the mechanism of action of "Sonic hedgehog," a putative signaling molecule involved in the establishment of the dorsoventral and anteroposterior polarity in the vertebrate CNS and limb, respectively. Three lines of experimentation are proposed. First, the applicant will attempt to study the secretory pathway of Shh in in vitro using reticulate lysate assays and in cos cell transfection assays. These studies will be complemented by an analysis of Shh protein distribution in the embryo using immunohistochemistry. Second, Shh protein will be synthesized and purified. Purified protein will be used in various in vitro assays that examine the potential role of Shh in the establishment of limb and CNS polarity. In addition, it is proposed to express Shh ectopically in transgenic mice and also in cells that will then be grafted to chick limb buds. A third specific aim is to mutate the Shh gene by homologous recombination in the mouse. These experiments will reveal whether Shh is indeed required for the establishment of the dorsoventral and anteroposterior axes in the CNS and limb, respectively. Collectively, these experiments will shed light on the synthesis, secretion and mechanism of action of Shh in vertebrate development.